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Eastman Chemical (EMN) Q1 Earnings Lag, Sales Beat Estimates
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Eastman Chemical Company (EMN - Free Report) recorded a profit of $235 million or $1.80 per share for the first quarter of 2022, down from a profit of $274 million or $1.99 in the year-ago quarter.
Barring one-time items, earnings were $2.06 per share for the quarter, down from $2.13 in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of $2.07.
Revenues rose around 13% year over year to $2,714 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $2,457.3 million.
The company gained from its innovation-driven growth model, strong end-market demand and pricing actions amid headwinds from higher raw material, energy and distribution costs in the reported quarter.
Eastman Chemical Company Price, Consensus and EPS Surprise
Revenues from the Additives and Functional Products division went up 32% year over year to $805 million for the reported quarter, aided by higher selling prices and increased sales volume/mix. Volumes were driven by strong demand in major markets, including building and construction, personal care, and animal nutrition.
Revenues from the Advanced Materials unit rose 3% year over year to $737 million in the previous-year quarter. The upside was driven by higher selling prices that offset lower volume/mix. Selling prices were driven by strong demand and higher raw material, energy, and distribution prices.
Chemical Intermediates sales climbed 32% year over year to $799 million, led by an increase in selling prices due to higher raw material, energy and distribution prices. Sales volume/mix was roughly flat as strong demand in the agriculture market for functional amines was offset by acetyl products impacted by the steam line incident at the company’s Kingsport manufacturing facility.
Fibers segment sales went down 2% year over year to $213 million due to lower volume/mix that more than offset higher selling prices.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $487 million, a roughly 10% year-over-year decline. Net debt at the end of the quarter was $4,876 million, a roughly 2% decline year over year.
Eastman Chemical generated cash from operating activities of $17 million compared with $216 million a year ago. The company also returned $98 million to its shareholders through dividends.
Guidance
Moving ahead, Eastman Chemical envisions strong performance from the first quarter to continue for the balance of 2022. It remains on track with its pricing actions to offset inflation in 2022. It also anticipates its specialty product lines to continue to grow faster than end markets and drive additional mix improvement.
The company continues to expect adjusted earnings per share of $9.50-$10 for 2022. It also anticipates operating cash flow to approach $1.6 billion this year.
Price Performance
Eastman Chemical’s shares have declined 6.9% over a year, compared with the 4.9% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 34.3% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 84% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 57% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 42% in a year.
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Eastman Chemical (EMN) Q1 Earnings Lag, Sales Beat Estimates
Eastman Chemical Company (EMN - Free Report) recorded a profit of $235 million or $1.80 per share for the first quarter of 2022, down from a profit of $274 million or $1.99 in the year-ago quarter.
Barring one-time items, earnings were $2.06 per share for the quarter, down from $2.13 in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of $2.07.
Revenues rose around 13% year over year to $2,714 million in the quarter. The figure surpassed the Zacks Consensus Estimate of $2,457.3 million.
The company gained from its innovation-driven growth model, strong end-market demand and pricing actions amid headwinds from higher raw material, energy and distribution costs in the reported quarter.
Eastman Chemical Company Price, Consensus and EPS Surprise
Eastman Chemical Company price-consensus-eps-surprise-chart | Eastman Chemical Company Quote
Segment Review
Revenues from the Additives and Functional Products division went up 32% year over year to $805 million for the reported quarter, aided by higher selling prices and increased sales volume/mix. Volumes were driven by strong demand in major markets, including building and construction, personal care, and animal nutrition.
Revenues from the Advanced Materials unit rose 3% year over year to $737 million in the previous-year quarter. The upside was driven by higher selling prices that offset lower volume/mix. Selling prices were driven by strong demand and higher raw material, energy, and distribution prices.
Chemical Intermediates sales climbed 32% year over year to $799 million, led by an increase in selling prices due to higher raw material, energy and distribution prices. Sales volume/mix was roughly flat as strong demand in the agriculture market for functional amines was offset by acetyl products impacted by the steam line incident at the company’s Kingsport manufacturing facility.
Fibers segment sales went down 2% year over year to $213 million due to lower volume/mix that more than offset higher selling prices.
Financials
Eastman Chemical ended the quarter with cash and cash equivalents of $487 million, a roughly 10% year-over-year decline. Net debt at the end of the quarter was $4,876 million, a roughly 2% decline year over year.
Eastman Chemical generated cash from operating activities of $17 million compared with $216 million a year ago. The company also returned $98 million to its shareholders through dividends.
Guidance
Moving ahead, Eastman Chemical envisions strong performance from the first quarter to continue for the balance of 2022. It remains on track with its pricing actions to offset inflation in 2022. It also anticipates its specialty product lines to continue to grow faster than end markets and drive additional mix improvement.
The company continues to expect adjusted earnings per share of $9.50-$10 for 2022. It also anticipates operating cash flow to approach $1.6 billion this year.
Price Performance
Eastman Chemical’s shares have declined 6.9% over a year, compared with the 4.9% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 34.3% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 84% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 57% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 42% in a year.